New research analysed by savings and mortgage provider Nottingham Building Society, known as The Nottingham, ranked regions on saving habits and total savings in order to discover the most savings-savvy locations in the UK.
The HMRC data revealed that people in the South East of England are the biggest savers, with a healthy average of £32,984 in their ISAs - over £5,000 more than the national average ISA market value of £27,606.
London has the second highest ISA average of £30,624, despite the high cost of living within the capital, closely followed by the South West, with average ISA savings of £29,397.
The region with the least saved in their ISAs is the North East with £21,749, followed by Northern Ireland (£23,028) and Wales (£23,295).
The top UK regions with the most amount of ISA savings on average are:
- South East (£32,984)
- London (£30,624)
- South West (£29,397)
- East of England (£29,364)
- Scotland (£28,044)
- West Midlands (£25,220)
- North West and Merseyside (£24,630)
- East Midlands (£24,517)
- Yorkshire and the Humber (£24,368)
- Wales (£23,295)
Further research from a study of nearly 175,000 UK residents, conducted through YouGov Profiles, has revealed Brits’ top reasons for saving. Over a third (34%) of people are saving for travel or holidays, while more than a quarter (28%) say they’re saving for a rainy day. Retirement was the third most popular life event to save for, with a fifth (20%) saving for our golden years, while one in seven (14%) are saving for a house deposit.
Jenna McKenzie-Day, Senior Savings Manager at The Nottingham said: “Twenty years after its launch, it’s great to see so many savers making the most of their tax-free allowance with an ISA. To those that haven’t yet started saving, these average amounts may seem high and hard to achieve but the sooner you can start, the better. Our savers are always sharing their tips and sometimes small changes can be a great place to start building your savings habit. The most popular tip is keeping a money diary to keep track of your finances and see where savings can be made. By writing everything down, it becomes clear where any unnecessary outgoings are happening.
“Another great first step is opening a savings account. Whether it’s a holiday or a home you’re saving for, it is important you choose the right account for your goal. Our customer data has shown that Starter ISAs and Easy Access ISAs have proven popular so far this year, as they made up 81% of all ISA accounts opened in April 2019. Furthermore, our LISA has been our fastest growing product for first-time buyers with seven times more people opening a LISA compared to its closest equivalent, the soon to be redundant Help to Buy ISA.”
When it comes to buying a property, UK homebuyers may rely predominately on mortgages and cash payments, but their knowledge towards other financial products is limited, new research by Market Financial Solutions (MFS) has revealed.
The bridging lender commissioned an independent, nationally representative survey among more than 2,000 UK adults to uncover just how Brits have been financing their property purchases. Of those who have bought a property since 2007, 42% identified as cash buyers while a further 52% said they had used a mortgage or re-mortgage.
Taking into account the rise of the UK’s alternative finance industry – currently worth over £4.6 billion – the research also revealed a noticeable uptake in products outside of mainstream loans. Nearly one in five (19%) homeowners said they had used a form of alternative finance, ranging from crowdfunding to mezzanine finance and unregulated loans, with this figure rising to 29% among respondents aged between 18 and 34. Meanwhile, 13% of homebuyers said they had used a bridging loan – this number increased to 21% for those who were investing in a second home.
Deciding on how to finance a property purchase can seem overwhelming given the number of loans and products currently available in the UK. As a result, 37% of homebuyers have relied on a broker to help them find a financial product best suited to their needs.
However, MFS’s research also showed that the reliance on mortgages and cash payments was partly due to a lack of knowledge surrounding other available finance options. Reflecting the competitive nature of the country’s property market, nearly a quarter (24%) of buyers said they would have liked to have considered other financial products but feared they would lose out on their property purchase if they delayed their credit decision. Delving into awareness of specific alternative finance products, nearly half (49%) did not have a strong enough understanding of bridging loans or the situations in which they can be used.
Paresh Raja, CEO of MFS, commented on the findings: “Mortgages have long been the go-to method for financing a house purchase in the UK. But over the past decade, a range of new alternative finance products has arisen to give buyers different options that might be better suited to their needs. However, today’s research demonstrates that there remains a lack of understanding about what these options are and how to use them.
“From crowdfunding platforms to raise a deposit, through to bridging loans to buy a property at auction, there are many opportunities now accessible for those needing to access credit, and to remain reliant on the mortgage market could restrict an individual’s ability to get the funds they need. Indeed, in the UK’s competitive property market, it is essential that buyers are aware of the financial products they can choose from, in turn putting themselves in the best position to progress with a purchase quickly and efficiently.”
(Source: Market Financial Solutions)
The Bank of England (BoE) has released its latest data on mortgage lending this morning which reveals that new lending commitments are at their highest level since 2008 Q1.
BoE also reports that first time buyers increased their share of the market to 21.4% in Q2 2018 - a rise of 1.8% against the previous quarter. Despite the surge in lending, the mortgage market continues to be challenged by a combination of fierce competition from traditional and non-traditional players.
With the rise in the lending market, there is an ever-growing need for traditional lenders to offer innovative solutions that provide faster and more efficient end-to-end mortgage resolutions.
In the FCA’s Mortgages Market Interim Report 2018, the need for more customer-facing innovation in the mortgage market is being encouraged for traditional lenders. On average the loan procedure can take approximately 45 days and this can be exasperated if the loan requires additional underwriting.
Most of the time the lenders will underwrite applications manually, which risks inaccurate pre-approval. Traditional lenders are seeking out next generation technology solutions to compete with non-traditional players to better manage the entire mortgage lifecycle.
Across the assessment, valuation, offer and contract completion process, manual data-entry errors can be reduced using Optical Character Recognition technology (OCR) by attaining customer data from key documents automatically. These bots extract applicant’s personal details from know your customer (KYC) documents and automatically review the applicant’s credit history which will speed up the mortgage application lifecycle, thus reducing the probability of manual error.
Puneet Taneja, Head of Operation at Intelenet Global Services, comments: “Buying a property is an important chapter in anyone’s life - dragging out the process creates a great deal of stress, preventing customers from getting their dream home as quickly as possible. Rather than having to wait for days to find out whether an applicant is eligible for a mortgage, automating the checks required across the assessment, valuation, offer and contract completion process takes away the headache away from mortgage brokers so they are able to communicate to customers and give them offers in 30 minutes.
Puneet continues: “Using this AI & Automation based initiative which uses bot technology to gain business intelligence alleviates the pain of mortgage brokers getting applicants data to find out if they are eligible. Digitizing the home-buying process by intelligent reporting & dashboards reduce processing times by 40% and costs by 50%.”
(Source: Intelenet Global Services)
Financial terminology is continually thrown around as we navigate through the different stages of our lives. The need to entirely acknowledge and comprehend what some financial terms mean becomes most apparent when making difficult financial decisions such as how best to climb onto the property ladder and selecting the best saving account or investment product that could provide the greatest return in the future.
With words and phrases in areas such as banking, savings, investments, pensions and mortgages more than likely to feature heavily in an individual’s handling of their personal finances – the expectation would be for them to have a firm grasp of common and recognisable financial jargon. Unfortunately, this does not seem to be the case, as 31% of Brits have shockingly admitted to signing a financial contract without knowing some or all the terminology according to research by Norton Finance.
Interested in financial competency, Reboot Online Digital Marketing Agency analysed findings from YouGov, who surveyed 1,916 British adults to see how confident they were with the meaning of a range of financial words and phrases.
Reboot Online found that ‘savings account’ is the financial term that most Brits are confident about at 92%. Thereafter, 78% claim to be assured by what a ‘cash ISA’ is. In third position, 74% of Brits feel confident enough to know what a ‘building society’ represents and can differentiate it from a normal bank.
Interestingly, despite regularly featuring in the small print of advertising mediums for potentially significant purchases like cars, only 64% of Brits are entirely confident about what a ‘fixed or variable annual percentage rate (APR)’ truly is. Information for immediate release Reboot Online Digital Marketing Agency.
Focusing specifically on the different types of mortgages and the terms related to it - Brits seem most confident knowing what a ‘fixed mortgage’ (72%), ‘mortgage deposit’ (63%) and ‘tracker mortgage’ (49%) is. Contrastingly, Brits are apprehensive about how a ‘shared equity mortgage (58%)’ and ‘offset mortgage’ (57%) respectively work.
On the other end of the scale, the British public were least confident about a ‘spread betting account’, with an overwhelming 67% unsure about its proper connotation. Closely by, 65% are shaky about what ‘corporate bonds’ are. 64% of Brits were equally unclear by a ‘tracker fund’ and ‘self-invested-personal-pension’.
Shai Aharony, Managing Director of Reboot Online commented: “Jargon specifically related to certain sectors and subject matters can be a mind field. Individuals can therefore often get lost in translation when trying to decipher them. Despite this, considering the fact that numerous financial terms have a substantial impact on minor as well as major saving and spending intentions, Brits should be more accustomed to them. This research certainly shows that Brits currently lack the knowledge and confidence to correctly understand a handful of financial terms in a range of important areas such as mortgages, pensions and savings. Going forward, there should be a real drive to educate Brits from an early age on the different aspects of the financial world that will more than likely affect their personal and business matters in adulthood.”
(Source: Reboot Online)
Online research from Equifax, the consumer and business insights expert, reveals that 39% of Brits expect Brexit to negatively affect how they access and manage their finances.
The survey, conducted by YouGov, also highlighted the younger generations’ pessimism about Brexit with over half (56%) of 18-24 year olds believing exiting the EU will make it more difficult to access and manage their finances, compared to 30% of those 55 and over.
Of the overall 39% who think Brexit will make managing and accessing their finances more difficult, 34% believe it will make securing a loan or mortgage more difficult and 15% think it will be more difficult to get a credit card. In contrast, of the 19% of Brits who expect Brexit to have a positive impact on their ability to manage and access their finances, 9% think it will be easier to secure a loan or mortgage, and 8% think it will be easier to get a credit card.
Almost a quarter of Brits currently employed (24%) believe Brexit will worsen their employment situation, with potential job losses, pay cuts or reduced hours; only 5% of people think it will improve their employment situation. Among self-employed respondents, 26% expect Brexit to negatively impact their business, versus 8% who are positive about their business position in a post-Brexit environment.
Jake Ranson, Banking and Financial Institution expert at Equifax Ltd, said, “These findings highlight the very real consumer concerns and confusion about the impact of leaving the EU on finances. With conflicting information circulating on the issues of job security and the level of economic fallout, people are feeling very anxious. Exiting the EU is an incredibly complex process and so it’s important that people take steps to manage their finances in anticipation of unpredictable changes ahead.
“New developments in the banking sector next year, particularly Open Banking, will help people navigate the uncertain environment with new tools to manage their finances and better assess the services available to them. The industry must work together to encourage consumers to engage with these initiatives so that the full benefits are properly understood and realised.”
(Source: Equifax)
